Yellow Pages Commando News by Dick Larkin
Why Pay-Per-Call Excites Me

December 29, 2004

-- Pay-Per-Call Will Revolutionize Online Advertising
-- Answer to Last Week's Brainteaser
-- Oh waiter . . .
-- Got Insurance?
-- She could pitch for the Padres.
-- Vanity Toll Free Numbers
-- YPA Introduces Search Directory
-- I don't recommend his meatloaf.
-- Just scoop and flush the junk mail.
-- This Week's Brainteaser
-- Quote of the Week

I've recorded this newsletter so that you can listen to it as well as read it. It's pretty cool. Check it out.

Pay-Per-Call Will Revolutionize Online Advertising back to top Forward to a Friend
If you're not familiar with Pay-Per-Call (PPCall), it's just like Pay-Per-Click (PPClick), except the advertiser pays when someone calls his business rather than clicks an ad that leads to his web site.


I like PPCall because I trust it more than I trust PPClick advertising. I don't think I'm alone in this, either. I manage several PPClick campaigns across the major search engines, and I constantly question the value of the click traffic delivered. I can tell which keywords perform the best at delivering clicks, but the conversion of those clicks into paying customers remains elusive.

T-Commerce vs. E-Commerce

75% of Yellow Pages advertisers are service-focused businesses. They are either 100% service-based such as tax preparers and attorneys, or they are "installed product" businesses such as roofers and general contractors.

These types of businesses are simply not conducive to doing much e-commerce. Their value comes from physically accomplishing unique tasks, and that rarely fits into a neat little e-commerce shopping cart.

These businesses rely on "T-Commerce." T-Commerce is my term for "Telephone Initiated Commerce." They rely on the telephone to acquire customers. They really don't want potential clients going to their web site; they want them on the phone.

Internet companies such as Amazon, Expedia, and eBay have very sophisticated systems for determining the conversion rate of every keyword and click. On the other hand, it's nearly impossible for a local attorney to place a value on receiving 1,000 clicks to his web site. The attorney questions if the clicks are actually interested potential clients or if he's being scammed.

On the other hand, the attorney will place much more trust in a voice on the other end of the telephone. He'll be able to determine in fairly short order if the caller is a legitimate potential client. Because of the much higher conversion, the attorney will be willing to pay significantly more to receive those calls. He knows he won't convert every caller into a paying client, but he'll at least believe the lead was real.

Low Tech

The underlying technology for operating a PPCall system has been around for years. Call measurement services are widely available and the wholesale rates have been plummeting recently.

The two players that have been making the most noise, ok, the only noise, in the PPCall space are FindWhat and Ingenio. FindWhat provides a bid-for-placement engine with some distribution capabilities. Ingenio provides the call measurement service (CMS) component. Both companies claim to have superior proprietary technology. I'm not savvy enough to know if they're telling the truth, but I'm impressed with what I've seen.

Regardless, the basic technology for CMS is available from a dozen or so companies including DCCI, Who's Calling?, CallSource, Standard Call, eStara, and Century Tel. Granted, Ingenio may have added a few layers of improvements specifically for the PPCall model, but the basic CMS is widely available. I also don't believe that it would be too difficult to adapt the core CMS to a PPCall service.

FindWhat has a strong bid-for-placement engine that Verizon licensed for SuperPages.com. It's pretty sophisticated, but I don't believe it's unique. There are several developers of bid engines. FindWhat does have a distribution component, and that's unique.

Simple is Good

The thing that really excites me about PPCall from a business perspective is that people "get it." It's pretty easy to explain the basic concept to an advertiser. The business owners I talk with are comfortable discussing PPCall. Often, when we talk about PPClick, I can tell they become uneasy and zone out. They understand the concept of only paying when someone calls.

Not in Print

In recent years, a few small independent publishers have aggressively modeled their print business around "performance guarantees" incorporating call measurement services and metered telephone lines. These isolated instances don't provide enough evidence to determine if this trend will spread. From what I hear, they have not been very successful.

I don't think we'll see any meaningful migration of a PPCall model in the printed Yellow Pages anytime soon. Managing a PPCall campaign to an advertiser's budget requires the flexibility provided by online advertising. Printed directories are much more conducive to subscription-based advertising. That being said, who's to say that a hybrid of subscription & performance won't evolve?

More importantly, the print YP industry has far too much at stake to mess around with performance-based advertising. As long as Yellow Pages advertising delivers sufficient ROI, there really isn't a need to change.

Distribution Model

Another compelling aspect of PPCall is that the company selling the service to the advertiser can negotiate distribution deals with multiple online directories, portals, and search engines. The sales agent isn't restricted to monetizing his own traffic. Google has effectively shown that distributing PPClick advertising content can be quite lucrative.

How Call Measurement Works

Here's a brief call measurement primer. The directory publisher provides a unique phone number for an advertiser. This number doesn't appear anywhere outside of the publisher's directory, so calls to this number will accurately measure the directory's effectiveness. Calls to the metered number route through a call measurement service (CMS) that records details such as how many times the phone rang before it was answered, how long the call lasted, and what time the call was placed. The CMS is often able to track the phone number where the call originated, the owner of the phone and the phone's address. Some CMS combine this data with demographic information to provide an insight into the neighborhood.

The caller is unaware that the number is routed or metered.

Who will be the big winners in PPCall?

Ultimately, the company selling the ads will be most successful. Selling is the hard, dirty work that most companies can't stomach. YP publishers will reap the biggest rewards. Others that are able to focus a sales effort in vertical markets will also profit substantially.

Technology providers will also profit. I expect that FindWhat and Ingenio will benefit from their first mover status. However, there is plenty of room for various players.

Distributors will profit. The companies who amass the distribution networks will profit from PPCall.

Web sites that deliver callers (customers) will profit from this. As Google has shown, this space is wide open.

Finally, advertisers profit. The ability to generate measurable leads is an extremely valuable business asset. This is a win-win for everyone involved.

That's why I think that PPCall will be the biggest thing to hit online advertising since search marketing.

Answer to Last Week's Brainteaser back to top Forward to a Friend

Consider these strings: 1, 11, 21, 1211, 111221, 312211, ... what is the next item?

As a hint, it is called an audioactive puzzle.

See the Answer & Our Celebrity Winners

Oh waiter . . . back to top Forward to a Friend

Oh waiter . . . there's a fly in my soup.

According to USA Today, the average American will buy 200 meals from restaurants in 2004 - 117 takeout and 83 on premises.

Add our complimentary Yellow Pages to your web site.

Got Insurance? back to top Forward to a Friend

This scares the bejeezus out of me.

I think about this happening every time I'm behind one of those trucks.

Check out my Christmas Trivia Quiz

She could pitch for the Padres. back to top Forward to a Friend

I spent years in Catholic school dreaming of doing this.

First person who cracks a penguin joke gets eternal damnation.

Vanity Toll Free Numbers back to top Forward to a Friend

Bernard "Mr. Sunshine" Sonnenschein has a company that sets up vanity toll free numbers for just about anything you can imagine. Think of the success of 1-800-FLOWERS or 1-800-DENTIST.

It's a very clever service, and something that marketers find very appealing.

I'd like to welcome Mr. Sunshine and MyTollFreeNumber.com as sponsors of the YPcommando News.

I rarely accept sponsors for this newsletter, but this is one service that you can offer (or use) and be a hero. How cool is that?

Check out MyTollFreeNumber.com

YPA Introduces Search Directory back to top Forward to a Friend

Neg Norton (not shown here in my newest tattoo), Jedi Master and Bowling Team Co-Captain of the Yellow Pages Association announced the creation of a local search guide, which they creatively named "local search guide."

The guide serves as an objective resource compiling information on various IYPs, search engines, and web marketers.

I'm encouraged by this move by the YPA because it recognizes the fact that Yellow Pages are but one component in the universe of local marketing.

Atta boy, Neg!

Check out www.LocalSearchGuide.org

I don't recommend his meatloaf. back to top Forward to a Friend

I taught my dog to cook. The only problem is that everything he makes smells vaguely of Alpo.

Speaking of dogs, my buddy Lewis has one ugly pooch.

Just scoop and flush the junk mail. back to top Forward to a Friend

OK, this wins the prize as THE MOST redneck mailbox ever.

That reminds me . . .

Ken Clark recently interviewed John Greco, President and CEO of the Direct Marketing Association.

Interview with John Greco.

This Week's Brainteaser back to top Forward to a Friend

Mr. & Mrs. Festus Fartwinkle have four daughters. Their four daughters each have a husband, two brothers and two sons. How can all of the Fartwinkles fit into Festus's Monte Carlo without nobody gettin' mashed?

Email your answer to puzzler@dicklarkin.com

The winner will receive 15 minutes of uninterrupted fame as well as a copy of Michelle Nichols's hot new CD Sell More in 2005! ONE BIG IDEA to Rocket Your Sales.

To improve your random chances of winning, please include your name and company name.

I draw the winner the day before I send the following newsletter, so keep voting until the polls close.

Check out Michelle's new CD. I'm keeping a copy for myself.

Quote of the Week back to top Forward to a Friend

"Genius, nothing! Sticking to it is the genius! I've failed my way to success."
-Thomas Edison

Check out the Brain Teaser Archive.

Contact Information back to top Forward to a Friend

email: news@ypcommando.com
voice: 858-614-5425
web: http://www.YPcommando.com


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